Substantial compliance can sustain customs exemption where defence-use certificates meet notification requirements in substance despite formal defects.

Substantial compliance with an exemption notification was treated as sufficient where imported telescopic cylinders were used in manufacture of defence equipment supplied to the Indian Army, and the Revenue did not dispute substantive eligibility. The duty exemption certificate was accepted despite not being in exact first-person form or containing every particular expected by the lower authority, because it certified duty-free clearance against defence requirements and was countersigned by the Joint Secretary, Ministry of Defence. On that basis, exemption under Notification No. 39/96-Cus. and refund of basic customs duty were considered admissible.

---

---

Issues: Whether the imported telescopic cylinders were entitled to exemption under Notification No. 39/96-Cus. despite the objection regarding the form and particulars of the duty exemption certificate, and whether refund of basic customs duty was admissible.

Analysis: The import was for use in manufacture of defence equipment supplied for the Indian Army, and the Revenue did not dispute the substantive eligibility for exemption. The certificate on record certified that the imports were eligible for duty-free clearance under the notification and that they were against defence requirements. It was also countersigned by the Joint Secretary in the Ministry of Defence, which met the notification requirements in substance. The objection that the certificate was not in the exact first-person form or did not bear the particulars expected by the lower authority was not accepted, as the relevant condition had been substantially complied with.

Conclusion: The exemption under Notification No. 39/96-Cus. was held to be admissible, and the appellants were held entitled to refund of the basic customs duty paid.

Ratio Decidendi: Where the substantive conditions of an exemption notification are fulfilled, minor defects in the form of supporting certificates do not defeat the exemption if there is substantial compliance with the notification requirements.

---